Lib Dems seek talks to 'clear the air' with Branson over Rock bid

Sir Richard Branson came under pressure last night to meet opposition leaders to head off growing criticism that he is unable to answer crucial questions about his bid for Northern Rock.

Branson has come under fire from the Liberal Democrats, who argue that his plans for Northern Rock lack transparency and could jeopardise the £50bn of taxpayers' loans and guarantees.

Vince Cable, the Lib Dem Treasury spokesman, has requested Branson meet his team and the party leader, Nick Clegg, for a "clear the air" session. Cable is also concerned that Branson will invest in the bank using offshore vehicles to dodge scrutiny and avoid tax.

Cable said: "Sir Richard has suggested we meet his chairman, Sir Brian Pitman, and chief executive, Jayne-Anne Ghadia, but in view of the serious questions we have about the tax position of the Virgin companies he may use to support his bid and the transparency of the operation, we feel we need to meet him in person."

A spokesman for the Treasury said the government would only proceed with a sale if it was satisfied that all taxpayers' funds would be secure and repaid within the three-year timescale.

However, Cable said Branson's track record for conducting clever financial deals, often with a beneficial tax treatment, meant he should explain how the deal would be structured, along with the governance of the bank, should he succeed with a takeover.

A spokeswoman for Virgin said the board of the bank would have a majority of non-executives, with a senior non-executive based in the north-east. She said the bank's owner would be a listed UK company that paid tax in the UK.

She was unable to say which Virgin vehicle would own the shares in the new company and claimed that Cable's comments were part of a campaign to nationalise the bank. "A nationalisation of Northern Rock would consign the company to a run-off and the loss of most, if not all, jobs within that business," she said.

"Over the last two months we have replied to Dr Cable and have rebutted his colourful and incorrect claims. However, his desire to create political capital at the expense of the Rock's loyal staff and its customers means he will continue to ignore the truth of the position in favour of a political fantasy-land."